The Reserve Bank has canceled the licence of Karad Janata Sahakari Bank to conduct banking business citing that the bank does not have adequate finance. This means that the bank is prohibited from taking any deposit or making any repayment.
The central bank also requested the Commissioner for Cooperation Registrar of Cooperative Societies, Maharashtra to issue an order for winding up the bank and appoint a liquidator for it.
However, the RBI said, the process of paying the depositors of the bank will be set in motion. This means, on liquidation, every depositor will receive up to Rs. 5 lakh from the Deposit Insurance and Credit Guarantee Corporation as per usual terms and conditions. More than 99% of the depositors of the bank will get full payment of their deposits from DICGC.